How Paddy Procurement System in India Works?

Paddy Procurement-The Pillar of Indian Rationing System

Paddy Procurement

Paddy Procurement in India is considered to be the pillar of the Indian rationing system. There is no doubt that the success of this rationing mechanism completely depends on the paddy procurement system.

Paddy Procurement System

With the increase in the Minimum Support Price(MSP) of paddy, more and more farmers are keen to sell their produced paddy through Government mechanism such as Kishan Mandis(C.P.C), PACS, FPOs, SHG and etc.

It has been a continuous endeavour of both the State and Central Governments, to arrange food for all. Ensuring food for the marginal sectors has been the top priority for the Govts.

Vide Notification No-3(13)2019-Py.I Dated 25th July 2019 the Govt. of India has fixed the Minimum Support Price(MSP) for paddy procurement for the KMS 2019-20 as below:

Grade Paddy
Grade ‘A’ Paddy
MSP of Fair Average Quality Paddy per QuintalRs.1815/- Rs.1835/-

How does Paddy Procurement System work in India?

Before discussing how Paddy Procurement System works in India in detail, let’s see first the amount of paddy procured across India state-wise and also by Govt. of India through Food Corporation of India(FCI).

(Fig. in LMTs)
(Fig. in LMTs)
MADHYA PRADESH0.0025.9725.97
TAMIL NADU0.0025.0025.00
UTTAR PRADESH0.9555.6256.57
WEST BENGAL0.3721.8422.21

As per the available Govt. records, the paddy procurement for the Kharif Marketing Season(KMS) 2019-20 in India is a whopping 743.29 Lakh Metric Ton. So you can imagine the amount of paddy procurement that has taken place in India for food safety for the marginal sectors.

Therefore, you can check from the above table the status of every States in terms of paddy procurement and also procurement by FCI state wise.

What is Paddy Procurement?

For ensuring food for all the BPL enlisted citizens, both the Central and State Govt. procure paddy from the farmers by paying the minimum support price. Later this paddy is converted into Custom Milled Rice and delivered to Govt agencies for distribution to the public through ration shops.

India generally, paddy is procured through the below different systems namely;

  • a). Centralised Paddy Procurement System ;
  • b). Decentralised Paddy Procurement System;
  • c).Paddy procurement through direct purchase camps;
  • d). Paddy procurement through Co-operative Societies, SHGs, FPOs;

Paddy Procurement System in India-ArthikDisha

Under all the procurement system the fundamental concept is procuring paddy from farmers and providing them to different rice mill agencies for getting Custom Milled Rice(CMR).

Next, the agencies deposit the CMR to Govt. Food and Supply department for distribution through the Public Distribution System(PDS) and rice is distributed through the local ration shops.

Centralised Paddy Procurement System (Kishan Mandi):

Centralised Paddy
 Procurement Centre
  • Paddy Procurement through CPC: Procurement of paddy through Centralised Procurement Centres is the first priority of the state governments.
  • Notification of CPC: The Food and Supplies departments notify the Centralised Paddy Procurement centres District wise. Also, the District Controller, Food and Supplies Deptt. may notify additional CPCs block-wise if it is found that at any location intensive paddy cultivation is being done.
  • Operating Department: The Food and Supplies departments of the state govt. have been authorised to procure paddy directly from the farmers.
  • Objectives: Therefore, the objectives are very clear that maximum amount of paddy can be procured along with the fair and adequate price is paid to the farmers so that they are not deprived.
  • Minimum Support Price: This ensures that paddy procurement is done directly under the control of the Govt. and farmers are paid minimum support price of Rs.1835/- per quintal as set by the Govt. of India.
  • Maximum quantity: A maximum of 45 quintal paddy can be procured from a farmer during the entire KMS unless otherwise is decided by the Government.
  • Duration of the procurement: Generally, this paddy procurement is run throughout the entire KMS and continues till 30th April each year unless otherwise is notified by the Food department.
  • Appointment of PO & DO: To be able to accomplish this procurement process successfully the Govt. appoints one Purchase Officer and one Disbursement Office at each CPC who are responsible for the direct purchasing from the farmers and payment to them.
  • Registration: To be enabled to sell the produced paddy, the farmers are required to register themselves in the CPC. The designated purchase office will help the farmers to the registration process online at each CPC.
  • Documents required: The farmers are required to submit their Voter card as their identity proof along with Bank account passbook with IFS code mentioned and one copy of his photograph.
  • Registration Certificate: Once the online registration process is completed the farmers are given a system-generated Farmers’ Registration Certificate(affixing his photograph) bearing a unique number. The farmers are required to bring this registration certificate along with their Voter card and Bank passbook at the time of paddy procurement.
  • Muster Roll: The purchase officer is required to prepare a Muster Roll in triplicate and get it signed or thumbed by the farmers in all the three copies and send it to District Controller of Food and Supplies Deptt on weekly basis.
  • Same day payment: The farmers are paid on the same day of paddy procured from them through account payee cheque. So, the payment process is completely hassle-free.
  • Rice Millers: The paddy so procured from the farmers are to be deposited with the registered rice millers under the CPC for getting the Custom Milled Rice(CMR).

Decentralised Paddy Procurement System:

Decentralised Procurement System

Under Decentralised Paddy Procurement System, the State Govt. through their Food and Supplies Deptt. purchase paddy directly from the farmers at MSP.

Thereafter, the designated CMR agencies of the Govt. such as BENFED, CONFED, NAFED, NACOF, NCCF, WBECSC Ltd., Agri Marketing Corporation Ltd, will procure such paddy from the farmers either directly or indirectly through engaging Co-operative Societies, Self Help Groups, Farmers Producer Organisation and deliver the resultant Custom Milled Rice(CMR) to the Food and Supplies Department of the Govt. and to the FCI.

CMR agencies: There are some co-operative Federations/organisations engaged in agricultural procurement activities are called CMR agencies such as BENFED, CONFED, NAFED, WBECSC Ltd., NACOF, NCCF.

It should be kept in mind that while purchasing the paddy from the farmers the quality of the paddy must be uniform as specified by the F&S Deptt. from time to time.

Paddy Procurement through Direct Purchase Camps:

Sometimes the Govt. may decide to organise direct paddy purchase camps if it is felt that there are some areas where intensive paddy cultivation has been done but are at a distant place from the existing CPC and are not covered under a Co-operative society engaged in paddy procurement activities.

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The procurement camps can not be organised within a 3 km radius of the existing CPC.

In that case, the District Level Monitoring Committee(DLMC) may propose to organise such direct procurement camps either by the F&S Department or through CMR agencies.

The procedure of purchasing paddy by organising direct-purchase camps is the same in line with the procurement through the CPC.

So, the basic objectives must be followed here also that maximum amount of paddy is to be purchased and the farmers are paid the MSP on the day of purchase itself.

Paddy procurement through Co-operative Societies, SHGs, FPOs:

When procurement of paddy is done through the Co-operative Societies, Self Help Groups(SHG) and Farmers Producers Organisation(FPO), the CMR agencies usually enter into agreements with the selected Rice Mills and these agencies for procurement of paddy and custom milling thereof.

Usually, the distance between the rice mill and these procuring agencies is kept minimum so that the cost of transportation of paddy is also kept at a minimum level.

When PACs procure paddy from the farmers on behalf of the CMR agencies, they will hand over the paddy to the rice mill in front of the Block Extension Officer or Co-operative Inspector or other Govt. Officer.

This officer will certify the receipt of paddy from the PACs at the rice mill and thereafter send the certificate of delivery to the CMR agencies.

The CMR agencies also ensure that the farmers are paid on the day of selling their paddy itself through Account Payee Cheque.

How Paddy is turned into Custom Milled Rice and how it is delivered?

Here come the main responsibilities of the rice mills. The rice mills generally enter into a bipartite/tripartite contractual agreement with the CMR agencies, Co-operative societies and Food & Supplies Deptt. on behalf of the Govt. of West Bengal.

The paddy so procured are custom milled by the rice mills and are delivered either directly or through Co-operative societies. The ratio of resultant custom milled rice will be 68% for parboiled rice and 67% for raw rice.

These resultant custom milled rice must conform to the standards, norms and uniform specification of parboiled rice and raw rice as prescribed by the Govt. of India from time to time.

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